This Lord is Very Scientific-Chapter 688 - 620
(Anti-theft, to be released.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years is evident to the public. The propagation methods of games are no longer confined to rigid promotional modes, and the influence of games has gradually expanded to all aspects of life. Correspondingly, gaming companies need to continuously integrate resources, innovate and iterate, and improve performance to keep up with the rapid development of the times. Diversification strategy precisely aligns with the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, diversification strategy, as the preferred mode of corporate development, is also applicable to gaming companies. This article uses the Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; gaming company; performance; impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy adopted by enterprises to occupy more and explore new markets during their operation process. It is also a strategic planning method for enterprises to avoid the risks encountered in operating a single business by entering new business fields in a targeted and prepared manner. Applying diversification strategy to gaming companies can effectively improve company performance, bringing about a transformation from quantitative to qualitative changes in the company's development.
1. The macro background of diversification strategy
As we enter 2021, with the government's effective control of the pandemic, people's lives are returning to normal, and the economy and culture are experiencing a significant recovery. On April 30, 2021, according to the data released by the National Bureau of Statistics, the development of the cultural industry nationwide has basically returned to pre-pandemic levels[1]. This is extremely positive news for the gaming industry, which occupies a considerable portion of the cultural industry. Although the arrival of the pandemic did not severely affect the gaming industry, the inability to conduct offline activities has always impacted the performance of gaming companies. The recovery of the cultural industry means that most gaming companies can embark on a path of sustainable development, driven by the great development and prosperity of the cultural industry[2].
From the outbreak of the pandemic last year to its current stabilization, the government has issued relevant policies from multiple aspects such as finance, regulation, and finance to support the development of the cultural industry. Although the pandemic hindered people's travel, it could not control the speed of online network dissemination. More and more new media have emerged, driving the development of the cultural industry during the pandemic prevention and control period. However, because all companies want to enter the online market, the competitive environment among cultural industries is extremely fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society during this time. But in these short two years, many successfully transformed cultural industries have emerged. Most of these companies rely on the diversification strategy model to accelerate transformation and upgrades, and they also gained significantly during the pandemic prevention and control period when the residents' consumption levels increased significantly, obtaining more diversified development models and funding channels. For instance, the transformation made by the Sanqi Mutual Entertainment Company during the pandemic prevention and control is worth learning for most gaming companies[3].
2. A brief analysis and classification of diversification strategy
(1) A brief analysis of diversification strategy
Diversification strategy was proposed by Igor Ansoff, the forefather of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This strategy, which has influenced world strategy models, is involved in the management policies of multiple countries, so every small or large enterprise today is seeking a place according to the diversification strategy development model[4].
(2) Classification and meaning of diversification strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different modes derived from diversification strategy have distinct meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user demands, thereby driving market consumption. Vertical integration refers to enterprises, according to their development situation, deriving vertically and using the product industry chain to penetrate into other market fields to seek new consumer targets. Concentric diversification emphasizes innovation of existing technology and requires the production of new products within the existing production range, with the entire process realized through the transformation of existing technology. Conglomerate diversification focuses more on the change in the expansion of the business scope. Enterprises need to relate to the raw materials, technology, market, and other factors related to their products to expand the business scope[5].
3. The impact of diversification strategy on the performance of gaming companies
In the operation process of all gaming companies, the impact of diversification strategy on performance is uniformly divided into two parts: changes in the operation model and shifts in strategic planning. These two changes gradually produce effects that drive the improvement of company performance. The influences brought by diversification strategy are multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on the performance of gaming companies[6].
(1) Changes in the operation model
Currently, Sanqi Mutual Entertainment Game Company's main operation scope is extremely broad, which relies on the advantages brought by diversification strategy. The company's business involves not only the operation of interactive entertainment but also the development and distribution of mobile and web games under Sanqi Mutual Entertainment Game Company. In recent developments, the company has continuously innovated along with the technology of the times, expanded the market to include films and anime, and shaped its market culture industry chain through various entertainment businesses, such as music, VR technology, and various live broadcasts.
Sanqi Mutual Entertainment Game Company was established in 1995. However, the early development path was not smooth because Sanqi Mutual Entertainment Game Company was initially a small enterprise. In the beginning, Sanqi Mutual Entertainment's industry chain did not involve game or entertainment industry operations, with a constant risk of being swallowed by the market. Nonetheless, the steady development of its single industry led to Sanqi Mutual Entertainment Company's public listing in 2011. However, with poor operations and market contraction in the later stages, Sanqi Mutual Entertainment ultimately could not escape being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired a 60% stake in Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although officially acquired, for Sanqi Mutual Entertainment, it was an opportunity for development. With multi-party cooperation, the two companies completed various asset restructurings. It is worth mentioning that Sanqi Mutual Entertainment's ongoing exhibition strategy had already shown promise at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition into a dual-principal public company advancing in parallel with advanced manufacturing and modern cultural creativity, accompanied by changes in Sanqi Mutual Entertainment's corporate operation strategy. The initially covered business scope of the cultural creative industry
